If a Corporate Bond with Face Value of $8,000 Has

question 25

Multiple Choice

If a corporate bond with face value of $8,000 has an interest rate of 4 percent paid once a year for a term of 30 years,what is the size of the coupon payment?

• A)$320
• B)$2,000
• C)$8,000
• D)$9,600

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Definitions:

Net Income

The total revenue minus total expenses, representing the company's profit.

Operating Activities

These are the primary day-to-day activities of a business that relate to its production, sales, and deliveries of its products and services.

Prepaid Insurance

An asset account that represents the amount paid for insurance coverage in advance of the service period.

Depreciation Expense

Depreciation expense is the allocated reduction of the cost of a tangible fixed asset over its useful life, reflecting its wear and tear, or obsolescence.